Tips for saving a lot

[RedLorryHelloLorry]

Trying to keep this one short, but I can share more details if people are interested.

Can anyone share tips for saving up a lot of money?

I struggle because although I earn a decent wage, I don't have a huge amount of disposable income after bills are paid. What I tend to do is save for a while but then splurge. I also struggle because I mostly manage to save by really cutting back on "fun", but then I think "why not treat yourself". For example, I recently spent £10,000 on a second hand campervan because I believe it will really change my family's quality of life and opportunity to make memories together.

Long term, I want to save a big chunk of money for moving house/upsizing. For various reasons, I'll need to move house and area in around 4-5 years, and I want to make sure I have as much as possible to facilitate the move. I'm living in a cheap rural area right now, and I'll need to move somewhere where houses are more expensive.

Ideally I wish I could increase what I earn, for example through a second job or side hustle and then save all that money. But I don't think that's feasible as I can't think of any side hustles, and "proper" second jobs (e.g. bar work) would be difficult to fit in.

OK, this one was longer than I planned!

I realise you don't want to sell ideally, but wondering if you would lose out by selling? Plus what the estimated annual cost of keeping it running would be?

Thanks for the replies. I could sell the van and I think I would get most, if not all, my money back.

I think I'm reluctant to do this because I then think "then what"? Maybe I have the wrong mindset, but it wouldn't get me that close to my goal, and it would mean more boring weekends/school holidays for the kids and me.

But perhaps I need to totally change my mindset. I did this while saving for the deposit. However, I also told myself "once I've bought the house I can relax more". Although this doesn't seem the case.

I know I'm lucky to have a house and be able to save a little, maybe I'm just being ungrateful and this is how life is. I guess I'm frustrated because it felt like I was getting closer to "normality", by my finances have completely changed in the past couple of years and maybe i haven't properly accepted that.

@RedLorryHelloLorry Holidays during the holidays are £££. Even pitches go up.

I've read your updates, things sound really tight and I understand wanting some treats. You have done well to achieve all you have.

There will be sites that can give you avg maintenance cost idea per annum. Then have a look at how much pitches cost.

How much more will the desired house be? It will give you an idea of how much extra deposit you'll need and then how much extra monthly income you'll need to secure a mortgage. This will then inform what type of things you need to do to raise the cash or at least how much extra you need to do.

Money saving expert has some great calculators where you can model when mortgage repayments could look like.

You already living a minimal kind of life (and I don’t mean that disparagingly). Apart from the van, I don’t see how you can make significant savings without getting another job. Unless you get a lodger?

@RedLorryHelloLorry as for the van and the then what? You'd have made a significant start and that money will make a little interest.

Whilst it's in the van, it's losing value and costing you more money to look after the van/asset.

100% get the what do you do for fun after that. But until you've modelled what it might actually cost to go on several camper van holidays, you don't actually know if they're affordable anyway. Pitches aren't that cheap. Unfortunately.

www.goboony.co.uk/blog/the-annual-costs-of-owning-a-camper

Well done n your house purchase - that's a big achievement as a single parent.

I may be on the wrong track here but - I'm unsure your problem is a savings/money issue. I wonder if you haven't given yourself time to adapt your mindset to being a single parent?
It sounds as if you are striving to give yourself and your dc equivalent experiences and advantages of a two parent household (apologies if I'm way off here) - Are you mourning the loss of joint family wealth and opportunities? I sense this might be the root of your discontent and what is driving the need to 'splurge', and your wish to move.

Thriving as a single parent requires a mental adjustment, a new mindset and different expectations. A focus on different priorities and building a new way ahead. I feel a sense of floundering in your posts in search of this?

The money you'd get back from the van is substantial. You sound as though it would be irrelevant. It's about offering your kids a better version of you because you have peace of mind. That will undoubtedly improve the quality of their childhood.

I work in saving a for my job. I'd suggest switching your mindset, you need to save first when your pay comes in, not what's leftover.

Can you start by setting up a dd for £20-£50 to come out the day after pay day? A 'round up' type tool would work well for you. It takes the balance of up to 99p, everytime you spend on your current account.

Agree with others that although your income is good, your outgoings don't leave much spare. All I can suggest is scrutinise these hard to see if anything can be reduced?

According to the link above, maintaining the campervan will cost a minimum of around £1500 a year. It looks like fuel and pitch fees are on top of that.

The first question is whether you can actually afford it. Looking at your income / outgoings, unless you make other changes, I’m not sure you can. That’s £125 a month to start (actual holiday costs on top) and you only have a little more than that left over now.

Edited to say: if your maintenance costs are at the higher end of the scale it will cost you more than you have coming in.

Once you’ve looked at whether you can afford to keep the van, I agree with the suggestion of a ‘round up’ tool plus a regular saver (you can get some with a decent rate of interest).

Having said that, you won’t be saving a lot. The £10,000 value of the van in a fixed rate account at 5% will earn you £500 a year (and the interest will compound) rather than costing you money.

Sell the van. Imagine the “high” of knowing close to 10k is sitting in a savings account working hard for you earning you 5% interest.

Really, really allow savings and life goals (that house) become your motivators. The rest (financial self education, specific saving strategies, income and budgeting) will follow. But first you need to see your situation clearly for what it is and see your goals really clearly.

Avoid reducing pension payments in the future. Try and have a balanced strategy and stay clear of the ‘all or nothing’ approach - where you have no treats/fun, then get fed up and impulsively withdraw your savings. Build in and budget on a monthly basis for fun and treats. You have to live and enjoy life whilst also saving. x

Your future self will not thank you for keeping that van and not paying into a pension.

A good rule is save as a % half your age.
So if you're 30, get 15% I'd your earnings into long term savings.

I also think if you want to save more you need to to focus on earnings more. Easier said than done, but it won't happen accidentally.

Don’t cut your pension contributions. I think I’d just accept you’re in a tight spot with inflation and getting your first house. Well done on your house btw!

Lots of people can't afford to save. Just enjoy your campervan and save the money when you get a better paid job, it's too tight just now and you will have so much fun with the van. Focus on furthering you career and how you can get paid more.

perconslly I’d be selling the van if moving in a few years is important. Put the sales proceeds into a high interest savings account.

if you don’t want to do that the. Using the figures you gave I’d be trimming treats back to £100 and holidays back to £100. That’s £150 a month saved right there.

can you get a new job. You’ve talked about increasing income by a side hustle. But why not take your main job and either go somewhere else and negotiate a higher salary. Or stay where you are and negotiate a higher salary. then save the difference between the old and new.

What is your goal, OP? What are the consequences if you don't reach it? Or if you take, say, 7 years. You don't have much fat in your budget. Yes, you could trim your treats and holiday budget as suggested above, but that will only net you 9k in savings over five years. That's not an amount to sneeze at but it doesn't sound like this will get you anywhere close to where you want to be.

You have done really well in a tough environment to buy your own place and I can understand why you want to relax and treat yourself and your family. I'm not totally against the campervan as long as you are clear-eyed about the costs.

I do think a PPs suggestion of seeing if you can increase your main income is worth exploring. I know it's not easy to do this, but even if you can increase your income a bit, that might make your goal more viable if interest rates come down a bit in the next few years.

Thank you for the additional replies. I'm reading and processing everything.

I think one of the things I will have to do is adjust my goals regardless, perhaps accepting it will take a longer time to save up, and figure out how much money I really need to save.

It also sounds like I need to adjust my mindset around spending.

I'm continually looking for another job that pays more too, but there isn't a lot advertised in my field right now. Sadly, I don't have room for a lodger, but that could be something I could do in the next house to help offset the additional costs I'm anticipating.

I'm seriously considering selling the van in the spring because of all your comments. In the meantime, I'm going to create separate accounts for different pots of money, and cut my treat and holiday budgets. I'm also going to see if I can reduce my food spend by making smarter choices.

I saw some questions about my goal: right now I live in one of those areas that is due to be under annual flood level by 2025. I bought a house here because it's the area I have always lived, and my family are literally just down the road, which really helps with childcare. I come from a large family, our DC are similar age, so we have a great social life together too.

All the recent floods have made me realise I can't stay here long term, so I wanted to make a near-term exit plan. (Although they haven't affected me, thank god). Unfortunately, the towns and cities I know that are in neighbouring counties, which will not flood, are much more expensive. So a similar house is maybe £100,000 more. That being said, I haven't looked at all the towns, villages, hamlets etc. Just the ones I know that feel nice to live in with good schools and connections (as DC will be a bit older then).

Part of me feels like perhaps I'm catastrophizing, but another part of me wants to have a plan. My mortgage fix is up in just over 4 years, so that point feels like a good time to think about moving.

I like the Chase account. It gives 1% back on spending (up to £15 per month) and has lots of pots (each with interest of 4.1%. You can get higher interest but I like the ease of the pots, which you can name). I worked out the actual spend on a lot of categories (holidays, birthday presents, annual fees, etc) and have a standing order set up so that money goes out every part day, then I'm left with what I can actually spend that month.

You've done really well to get where you are now in the current environment by the sounds of it, don't beat yourself up that you aren't saving more.
Definitely don't cut your pension contributions, your future self won't thank you.
Right now I would focus on making sure I was in control of my outgoings and they are all as good as they can be, plus work on increasing income in the longer term. I would also suggest any pay rise you get, put that, or a proportion of it, straight away so you don't get used to more money. Rates permitting, your mortgage shouldn't ever go up so should feel easier in time.

👋 I think you are doing great. Is your child school age or are you still having to pay nursery etc (apologies if I missed this).
I just wanted to say that I can completely empathise, during lockdown I was able to save around 5-6k a year, but now I don't think I can save even half of that due to costs of everything rising and wages not increasing inline.
I suspect I have a few years on you and when I was younger I redirected money away from my pension, that now I wished I had prioritised as the longer the money is in the pension, the better off you will be longer term. Good luck x

I am self-employed (and quite lazy) so find that 'external' motivation helps.

As my income is flexible, one of the best methods for me is regular savings accounts. I set them up with a standing order and and treat them as a bill which must be paid - so when the standing order date is coming up I simply have to find/earn the money. I had five of these on the go last year as interest rates were so good and it surprised me how much I managed to save because I 'had to'.

(Of course, there is flexibility if I really need it - the standing orders can be changed or cancelled and the money is usually accessible if absolutely necessary.)

Without these little deadlines I'd probably slack a lot more once essentials are covered. For me, once it's in savings it's untouchable.

This won't work for everyone but it's worked quite well for undisciplined me!

*under annual flood level by 2050, not 2025 🤦🏼‍♀️